Rajan faults 'big borrowers' for eroding 'sanctity' of debt contracts in India
RBI governor calls for a change in mind-set
The sanctity of debt contracts in India has been "continuously eroded" by large borrowers in recent years, Reserve Bank of India governor Raghuram Rajan said in a speech yesterday.
"Too many large borrowers see the lender, typically a bank, as holding not a senior debt claim that overrides all other claims when the borrower gets into trouble, but a claim junior to his equity claim," Rajan said.
He added: "In much of the globe, when a large borrower defaults, he is contrite and desperate to show
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